NatWest faces rebellion over executive pay overhaul

theguardian.com:

NatWest executives are bracing for a potential shareholder rebellion at their annual general meeting on Thursday over a new pay policy that could net its chief executive, Alison Rose, as much as £5.2m a year.

The bank’s new pay policy – which will be put to a shareholder vote on Thursday afternoon – would see Rose’s potential bonus payouts increase by 25%, and result in a 43% rise for finance chief, Katie Murray, by 2023.

Rose was paid nearly £3.6m in 2021.

It will mark the first executive pay overhaul since the bank returned to majority private control last month, when the UK government stake fell below 50% to 48.1%. NatWest – formerly Royal Bank of Scotland Group – was nationalised through a £46bn bailout at the height of the financial crisis in 2008.

Influential shareholder advisory firm Glass Lewis is recommending that shareholders vote against the pay plan, amid concerns over the increase in potential executive pay, as well as the decision to replace long-term incentive plan (LTIP) with a scheme with fewer performance metrics that could make it easier to secure payouts.

“We are concerned by the increase in overall incentive opportunity and the introduction of an RSP (Restricted Share Plan) absent a compelling strategic rationale for this type of award structure,” Glass Lewis said in its report.

The new restricted share plan will allow Rose to earn as much as 150% of her £1.1m salary, while the new bonus plan will give the banking boss a chance to again double her base pay. Together, the changes will allow Rose to earn 25% more in bonuses than under the current policy, and raise Rose’s potential pay prospects by 19%.

It means the NatWest chief executive could earn as much as £5.2m by the time the policy is fully